Roy City council considers modest annual property-tax increases, service cuts and personnel options to close FY26 budget gap

Roy City leaders met in a special work session on Jan. 21 to review a projected shortfall in the city’s fiscal 2026 budget and identify options for closing the gap, including modest annual property-tax increases, further service cuts, early retirement buyouts and use of one-time reserves.

At the start of the session, the presiding Mayor summarized the problem bluntly: “There is no new sales tax revenue coming anytime soon to pay for employee salary increases, operating expenses, or anything else.” The mayor said the city will need roughly $1,100,000 in new recurring revenue each year just to cover merit and cost-of-living increases for staff, and asked council members to give the city manager guidance so a draft budget can be ready by the statutory deadline in May.

Why it matters: Sales and use tax is the city’s primary general-fund revenue source. Staff presented figures from Utah Tax Commission reports and the city’s CAFR showing Roy/Royce City generated about $8,100,000 in sales and use tax in 2024 and about $4,500,000 in property-tax revenue that year. Meeting presenters and department heads said taxable sales have stopped growing since late 2022 and that the state-derived population estimate used to allocate some tax distributions has fallen (from about 39,544 in 2020 to 38,591 in 2024, with a 2025 projection near 38,216 in the packet discussed). That population shift reduces the city’s share of statewide distributions and therefore the revenue available to run city services.

What council discussed

- Revenue drivers and limits: The mayor and staff reviewed charts from the city’s Comprehensive Annual Financial Report…